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Saskatchewan to pull back on local preference clauses in construction tenders

The Government of Saskatchewan has signaled it will remove clauses within its construction tenders and contract documents that gave companies residing in that province unfair advantage in the bidding process.

The so-called local preference clauses award points to companies that employ Saskatchewan workers in the tender-award process. Contract documents set local labour thresholds the company must meet or be subject to significant monetary penalty. As well, companies are expected to have had experience working within the Saskatchewan market.

The barriers offend the New West Partnership Trade Agreement and the Canada Internal Free Trade Agreement, both of which prevent one province from discriminating against the companies or residents of another in its policies and contracts for the procurement of services or goods. Saskatchewan is a signatory to both agreements.

“We were very pleased to see Saskatchewan is removing the clauses, allowing contractors from across the West to bid on a level playing field,” MHCA President Chris Lorenc said, noting the association this week received a letter from its Saskatchewan counterpart, confirming the government’s intent to pull back on the barriers.

Lorenc noted the MHCA was part of a broad, multi-association working group from across the West, with the Canadian Construction Association, which worked very diligently to pressure the Saskatchewan government to remove the trade barriers from their tender documents.

“I don’t think this would have moved as quickly or as effectively had our group not had the solid support and effort of the Manitoba and Alberta governments, in reaching out at a variety of levels in Saskatchewan to see the barriers taken down.”

Premier Brian Pallister was especially dedicated to the removal of trade barriers, he noted.

Saskatchewan introduced the local preference clauses last year, following the release of its economic restart infrastructure investment program. The Saskatchewan Heavy Construction Association noted in its letter to the Saskbuilds and Procurement minister that with the winding down of the highway stimulus program, there was opportunity to remove the local labour provisions within tender documents.

“Our association remains a strong supporter of free trade both internationally and interprovincially,” SHCA President Shantel Lipp said.

Once trade barriers are erected, they are difficult to remove and risk spurring other jurisdictions to follow suit, Lorenc noted.

“Free trade benefits all economies across Canada. Trade barriers cause everyone to lose, because when you interfere with the tender award process that selects lowest qualifying bid, ultimately the taxpayer is on the hook for higher costs.”